It’s likely you don’t need to be sold on the efficacy of loyalty programs. But, just in case you need a little reminder, a recent study found that just a 5% increase in customer retention can boost profits anywhere from 25% to a whopping 95%. Clearly, loyalty and retention are still exceedingly important parts of your business.
But, at the same time, another study has found that active loyalty program members—those who are engaged and regularly participate in a program—has decreased 2% over the past few years.
And while 2% isn’t a huge number, there are a couple things to note. First, that tiny little 2% can represent millions in the industry and perhaps even hundreds of thousands of dollars to a restaurant or convenience store business.
Next, that 2% only reflects the recent trends. If it’s the sign of a downward trend moving forward, it could spell big trouble for loyalty-dependent businesses.
So why are customers becoming less active in the loyalty programs they signed up for?
Imagine if you had the ability to attract guests to your restaurant when they are close by? Well, you do! Consider this powerful statistic: After a geofence message has been sent, 30-40% of recipients will visit the location within 24 hours.
Instead of blasting out a generic offer to anyone in the area, you can make your guests feel special with an offer that caters to them.
Here are five use cases where nearby guests can be sent highly targeted offers to entice them to come in:
Craft beer sales are booming.
Transitioning from niche industry to nationwide phenomenon, craft beer has become big business. These unique and flavorful brews now account for more than 23% of U.S. beer sales, which totaled $111.4 billion in 2017.
But with an ever-increasing number of options, how do you choose a beer you’ll like? Some help is being provided by World of Beer, a restaurant chain that features about 50 craft beers on tap and hundreds more in the cooler.
To rise above the competition, World of Beer and Paytronix created the “ALEgorithm.” In addition to being a clever play on words, it offers suggestions in much the same way that Netflix and Pandora Radio do. Guests indicate which beers are to their liking and get recommendations for future ones to try.
Stuart Wilson, Analytics Manager for the Paytronix data science team, worked with World of Beer to make its vision a reality. He joined us for an interview and shared some insight.
Paytronix: Can you tell us why the ALEgorithm was created? […]
Devin Handler, the director of marketing for Garbanzo Mediterranean Fresh, joined us and shared some insights on how the company’s loyalty program is driving visits.
Paytronix: Tell us about you and Garbanzo Mediterranean Fresh.
Handler: Garbanzo is a 20-unit quick-casual concept based in Denver, Colorado. High-growth mode is our MO, as we come off of 2017 having increased same-store sales by 6.5%.
Our marketing mix includes radio, print, and, of course, our loyalty program. The driver that stands out among the mix is what we can do with the more than 100,000 members of our V.I.B. [Very Important Bean] Rewards Program.
I came to Garbanzo a little more than a year ago from Qdoba Restaurant Corporation, where I was director of field marketing for five years and, before that, brand manager for almost two years. I have been working in restaurant marketing since 2010. […]